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The Box Trot


Discipline over conviction!


Walk out of any doorway,
Feel your way, feel your way like the day before.
Maybe you'll find direction,
Around some corner where it's been waiting to meet you.

(Grateful Dead)

Have you ever seen a tape in headlights? We've got Hoofy on one side of S&P 806 trying to hold up the fort, Boo on the other side screaming about the banks and Sammy is slithering between them saying "What, me worry?" It's much to do about nuttin, honey, and unless you've been anticipatory and proactive, you've likely fallen for one the Minx's many head fakes. Michael Jordon eat your heart out!

While my posture is naked and relatively flat (don't say it), I continue to harbor concerns regarding the legitimacy of the current "bottom." A quick check of the European/Asian bourses illustrates what happens when a level is tested repeatedly. This is the third (fourth?) test of S&P 775-800 and from a pure trading perspective, I think a violation would ultimately prove to be bullish. If we manage a trading lift right here, right now, I doubt that it will be sustainable.

Why, you ask, am I not being more aggressive in my positioning? It's a legitimate question but suffice to say that I respect the upside risk and I'm wary of overnight geopolitical developments. That, in and of itself, may be the ultimate bearish sign--I know that--but I will not let the fear of missing dictate my tactical methodology. If I find compelling situations that warrant risk, I will deploy the troops. Until then, I want to err to the side of caution, preserve my capital and patiently await my pitch.

I know that sounds redundant to many of you, I know that sounds redundant to many of you, but I will always give it to you straight. Trust me when I tell you that I'd prefer to be moving blocks of merchandise while making aggressive trading calls. However, this isn't the environment to be a cowboy, Collier, and happy trails are those lined with disciplined decisions.

Tomorrow's lineup includes the Deutsche Bank Info Tech fete (FDRY, QCOM, ADCT, EXTR, ERICY), the Lehman Services gig (SAP, THQI, MUSE, TTWO), Prudential's groovy semicap bus tour (ATYT, DPMI, NSM, MXIM, KLAC), Morgan's heavy metal (and mining) concert, Solly's Industrial gathering (ASD, NEM, JCI, TOL, WMI, GE, FLR, DE, SPW, BA, AA, NOC, ETN, LMT, MAS, RYL), CS First Boston's Transportation trip and a release of the trade balance.

It's hard to extrapolate too much from today's action and while it sorta feels like Friday to me, I'm not positioning myself that way (yet). I will remind you that yesterday's meltage violated the pennant in the S&P and broke the October lows in the banks--which is clearly negative. As it stands, my predication is to look for shorts (rather than longs) but there is a huge difference between saying something and doing it. Thus, I cannot, in good conscious, dust off the bear suit just yet. Sorry Boo.

This is a surely a frustrating environment but as we've unfortunately learned, it could be much worse. There are 240,00 U.S troops sitting on the edge of Iraq which means there are (more or less) a couple of hundred thousand parents/children wondering if they'll ever see their family again. Just a little perspective as we attempt to identify the next fluctuation in the financial markets.

Good luck into the close.
postion in spy

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

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